AI toys that can perceive, respond, and interact in real time, smart glasses that can control various electrical devices, smart door locks with dual biometric security… These hit products have brought the smart home market back into the spotlight in 2025.

According to a report by market research firm TechInsights, global spending on smart home devices, services, and installation fees will increase by 7% year-on-year to USD 125 billion in 2024, and this expenditure is expected to reach nearly USD 195 billion by 2030.

This is no accident, but an inevitable result driven by multiple factors. Technically, the integration of large AI models and edge computing has endowed smart home devices with scenario prediction and decision-making capabilities, reshaping the industry logic. In terms of connectivity, the smart home industry is undergoing an upgrading revolution from “single-product accumulation” to “scenario interconnection”; coupled with the “human-vehicle-home” ecosystem reconstructing life scenarios, it has profoundly disrupted the industry ecosystem. Additionally, with the continuous release of national policy dividends and the strong consumption willingness of young consumer groups, the smart home market has reached an explosive inflection point in 2025 under this dual-drive.

However, amid this same booming trend, today’s smart home practitioners are more low-key and pragmatic than they were a decade ago. Because they know that despite a decade of boom in China’s smart home industry, it has always lingered on the verge of a “true explosion”. Fundamentally, what it lacks has never been popularity, but three keys to triggering qualitative change—interactive experience, ecological interconnection, and scenario closure—all of which require calm dedication and down-to-earth progress step by step.
Ten Years of Boom, Yet No True Takeoff?
The achievements of the smart home industry over its decade of boom are obvious to all. During the “entrance competition period” from 2014 to 2017, the smart speaker war began, with global annual sales soaring from less than 1 million units in 2014 to over 150 million units in 2019, making it an “entrance-level product” for smart homes. By 2018, the smart home industry focused on in-depth scenario development; single products for vertical scenarios, represented by robot vacuum cleaners, boomed, securing a global market size of USD 4 billion in 2020. Later, during the pandemic, although most industries were temporarily at a standstill, the smart home industry responded to the “stay-at-home economy” and health needs by launching competitive products such as smart kitchen appliances and environmental health devices, directly addressing consumer pain points. Since the post-pandemic era, it has entered the ecological integration phase of whole-house intelligence and seamless interaction, striving to achieve a value closed loop for home life.

Of course, every coin has two sides. If the “Side A” of smart homes is the sales boom, then “Side B” is “experience complaints”. For example, smart speakers have been reduced to “high-end radios” due to dialect recognition failures and privacy concerns; robot vacuum cleaners have become “manual burdens” due to getting stuck and hair tangles; smart kitchen appliances have fallen into the “abandonment within three months” curse due to cleaning blind spots and pseudo-demands… It can be said that poor interactive experience is one of the “culprits” restricting the true explosion of smart homes.

A small survey we conducted among nearly 100 smart home practitioners found that although over 90% of practitioners have purchased smart home products, most households remain in the early experience stage, and the smart home products people usually buy are concentrated in mature small home appliances.

As many as 64% of practitioners own 1-5 smart home single products, making them typical “early adopters”. This indicates that most consumers are still in the initial exploration stage of purchasing individual smart hardware, with products concentrated in smart lights, smart speakers, etc. These single smart products have become the first choice for entry-level consumers due to their clear functions and affordable prices. Secondly, about 25% of practitioners own 6-10 devices, with a small-scale intelligent system at home, and products concentrated in smart door locks, smart air conditioners, etc.

Notably, although there are few users who have achieved high-level intelligence, 2% have opted for whole-house intelligent systems, indicating that the transition from “single-product accumulation” to “systematic application” is inevitable.

Pang Gonghui, Vice President of Wuqi Microelectronics, bluntly stated: “Over the past decade or so, the development of the smart home industry has been much slower than we expected. The reason is likely that device interconnection and intelligent interaction have failed to demonstrate sufficient value. Now, amid the AI wave, we see hope for breaking the deadlock.” According to reports, Wuqi has built a dual-drive business ecosystem of “connectivity + terminal AI”, focusing on the fields of communication and edge computing chips.

In the development of smart homes, the role of AI technology has been constantly evolving—it is shifting from initially assisting devices in perceiving environmental information to a stage where it makes independent decisions and proactively serves users based on perceived data. For instance, a smart doorbell can use edge AI to identify visitors in real time, notify the homeowner via voice or mobile devices, and even classify visitors (such as family members, friends, couriers) to help the homeowner respond differently. Smart glasses also use edge AI to achieve fast and accurate recognition of local voice commands; even in poor network conditions, they can control home appliances to execute user commands, such as turning the air conditioner on/off and adjusting the temperature.

Tom Nordman, Senior Director of Marketing for Home & Life Business at Silicon Labs, explained the necessity of AI technology in smart homes shifting from “perception assistance” to “decision-making core” based on three points: In terms of market demand, consumers expect smart homes to be more convenient and intelligent, capable of understanding and meeting diverse needs. The shift of AI from “perception assistance” to “decision-making core” enables devices to respond proactively, optimizing the home experience. In terms of technological development, advancements in AI algorithms, chip performance, and edge computing have enhanced devices’ ability to process complex tasks locally, providing technical support for AI to become the “decision-making core”. From the perspective of industry trends, as smart homes move from single-product intelligence to whole-house intelligence, AI is needed to coordinate devices for interconnection and collaborative work, driving it to become the “decision-making core”.

“Based on years of technical accumulation and understanding of industry trends, Silicon Labs is actively adapting to this shift,” Tom said. Silicon Labs has always paid close attention to the development and application of AI technology in the smart home field. In terms of chip technology, it uses the 22nm process node to build the third-generation wireless development platform, integrating AI/ML hardware accelerators to improve data processing speed and reduce power consumption, thereby meeting the computing power requirements of AI decision-making. At the software algorithm level, Silicon Labs has optimized machine learning algorithms to enhance the system’s ability to understand and process complex scenarios and user needs, providing accurate basis for decision-making. In terms of ecological cooperation, Silicon Labs has partnered with global ecological partners such as Samsung, Google, and Tuya Smart to integrate the advantages of all parties, obtain rich data and application scenarios, improve AI functions, and enhance decision-making capabilities in smart home scenarios.

Similarly, Mu Tao, Head of Marketing and Sales for XMOS Asia Pacific, also agrees with this shift trend. At the same time, he points out that edge AI technology plays a key role in this transition.

Traditional smart homes mostly rely on IoT networks to connect devices and control the operation of household equipment. In contrast, the new generation of smart homes based on edge AI technology—including the intelligent upgrading of various existing electrical appliances and devices, as well as brand-new products such as robot vacuum cleaners, home smart cameras that can monitor the behaviors of the elderly and children, emotional robots connected to large models, and audio input and monitoring devices or components that are independent or embedded in existing home appliances—combines environmental data, family members’ behaviors, voice, and other information with models based on user preferences, habits, and general behavioral rules. By comparing and analyzing real-time collected data with family habit models, it can dynamically optimize the operation logic of devices.

To embrace the widespread penetration of edge AI technology in fields including smart homes, XMOS has launched a series of AI-driven audio technologies targeting sound as an interactive medium, control method, and content output. These include innovative intelligent audio technologies and application solutions such as new spatial audio effects, voice capture and noise reduction, and audio-visual multi-modal AI processing. Mu Tao introduced that these audio solutions, which support both large models and edge intelligence, not only have powerful functions and high performance but also further reduce costs and power consumption, thereby accelerating the application of intelligent end-side devices and the popularization of large models.

Pang Gonghui pointed out that large AI models are moving from the cloud to end-side deployment. This marks that cloud-based processing of single-modal tasks such as images, voice, and text is gradually expanding to end-side AI intelligence, involving multi-modal interactions such as visual and voice modalities. This brings core advantages such as privacy and security, portable personalization, high speed and low latency, and low-power computing.
From Protocol Fragmentation to Interconnection
In addition to poor interactive experience, the “language barrier” between devices caused by protocol fragmentation is another key bottleneck hindering the true explosion of the smart home industry.

Since the smart home industry is inherently a technical field with fragmented ecosystems and diverse protocols, and consumers also have different preferences and pain points, a more feasible solution is for mainstream manufacturers to jointly develop and actively adopt application-layer protocols that are cross-ecosystem and cross-protocol. Matter is a revolutionary standard and innovative technology built to achieve interconnection in smart homes.

Shang Ruiyun, Representative of the Connectivity Standards Alliance (CSA) China, reaffirmed that the global smart home ecosystem based on Matter is an “open, integrated, and unified” ecosystem. For smart home control platforms, as long as they support a certain device type, they can control smart products of that type from any brand; for device products, they can be connected to any smart home control platform that supports Matter, and even to multiple platforms simultaneously; for users, they can freely match and choose control platforms and smart products. By the end of 2024, there were over 6,000 certified products in the Matter industrial chain.

Notably, in May 2025, Matter was updated to version 1.4.1, which mainly optimized the setup process and enhanced security. It has two core functions: one is the Enhanced Setup Framework (ESF), and the other is the ability to store network access information via NFC tags.

As the largest contributor of program code in the semiconductor field, Silicon Labs has fully invested in and actively participated in the development of the Matter standard from the very beginning. Tom firmly believes that with the launch and continuous evolution of the Matter standard, the fragmentation issue that has long plagued smart homes will be gradually resolved, and cross-ecosystem interconnection will soon be realized, accelerating the transition to the whole-house intelligence era. Although achieving full integration of different ecosystems is itself a major challenge, we have already seen some positive progress in this regard.

For example, Samsung and Google have begun to cooperate with each other: in different smart home networks, users can select each other’s sensors and devices from the Samsung SmartThings APP or Google Home APP, enabling convenient interconnection. Therefore, Matter has laid a solid foundation for the smart home industry to achieve cross-ecosystem interconnection, truly benefiting the user experience.

The promotion of the Matter protocol has also given rise to some challenges and concerns, such as security. For Matter, as the types of devices it supports continue to increase, consumers will pay more attention to security issues. Matter has imposed high standards and strict requirements on security from the very beginning. To ensure security, Matter has adopted a series of specific technologies, including authenticating devices joining the network, encrypting messages reaching their destinations, using verified standard encryption algorithms, and supporting Over-the-Air (OTA) updates.
Scenarios Determine the Ecosystem
Although efforts in communication protocols have largely prevented smart home single products from becoming “isolated islands”, ecological cooperation is the only way to achieve true interconnection.

Mu Tao put forward the view that “scenarios determine the ecosystem”. He believes that in the face of diverse smart home scenario needs, the key lies in providing a highly flexible technical platform. Through its software-defined SoC solutions, XMOS aims to empower customers to quickly develop customized products based on specific scenario needs (such as high-quality audio interaction), thereby responding more effectively to market opportunities. Mu Tao stated: “We are committed to accelerating the innovative implementation of key technologies such as audio through more flexible business cooperation models.”

In the transition from “single-point intelligence” to “full-domain intelligence”, Silicon Labs believes that the industry is in a stage where “ecological positioning” and “scenario definition” proceed in parallel. On the one hand, the rapid development of smart homes has brought increasing convenience to consumers’ home lives. Moreover, with the launch of the Matter standard, the fragmentation issue that has plagued smart homes will be gradually resolved, and cross-ecosystem interconnection will soon be realized—this will also help smart homes move from the era of smart single products to the era of whole-house intelligence.

On the other hand, the accelerated integration of artificial intelligence and the Internet of Things (AIoT) is an inevitable trend. Semiconductor products supporting AIoT enable devices to collect, analyze, and process data in real time at the edge without continuously connecting to the IoT network back and forth, thereby improving efficiency, saving resources, and enhancing security.

Based on this, Silicon Labs is actively carrying out ecological cooperation with domestic and foreign enterprises. As the application of Matter technology continues to expand, Silicon Labs is also strengthening cooperation with Chinese partners to explore the development of innovative products based on Matter technology. The company expects more Chinese enterprises to launch smart home products using Silicon Labs’ Matter chips—especially since Silicon Labs’ chips feature top-tier security, which is crucial for any rigorous IoT product supplier. Tom said: “Silicon Labs is also further strengthening its cooperative relationships with customers and partners in different fields to jointly explore and build innovative AIoT solutions.”

Ultimately, smart homes must serve the collaboration between people and homes, between people, and between people and devices, while complying with the power consumption and cost rules of consumer electronic products. In the same survey mentioned at the beginning of the article, when asked about “the maximum amount willing to pay for a core smart home single product”, practitioners’ choices showed a typical pyramid distribution (Figure 2): mid-to-low prices (below RMB 2,999) covered 84% of users, reflecting recognition of the functions of basic single products and price sensitivity; high-end demand and whole-house systems accounted for over 10%, indicating consumers’ expectations for whole-house intelligence.

In summary, a very important trend in 2025 and beyond is that AI technology is rapidly spreading to the edge and end sides. At the same time, it requires a balance of computing power, cost, and power consumption, as well as higher platform flexibility to meet the needs of more specific scenarios such as family members and home environments. All of this requires practitioners to stay grounded and work meticulously on every detail. When the interactive experience of smart homes is immersive, ecological interconnection is barrier-free, and scenario closure is valuable, looking back, this moment will be exactly the eve of the true explosion.